Cabinet green lights deal with China on double-track railway from Nong Khai to Bangkok

The memorandum of understanding on constructing the standard gauge (1.435 metre) railroad was signed on November 25 of last year, under which a joint steering committee was formed.

Eight meetings have led to the second MoU to divide up, in general, the responsibilities for the engineering, procurement and construction work.

The MoC will call for the setting up of the project’s SPV.

The 873-kilometre route from Nong Khai province to Map Ta Phut in Rayong and on to Bangkok would mainly carry freight trains running at 160-180km per hour. The focus is linking trade, services and goods transportation in Asean.

Construction was planned to commence on October 23, but was delayed when both sides remained divided on the construction costs for the four-phase project.

"The signing of the MoC will signal the tangible development of the project," government spokesman Sansern Kaewkamnerd said.

"However, no information on the interest rate for the loan and the budget for the project has been announced, since the two parties still cannot agree on some of the costs," he added.

Transport Minister Arkhom Termpittayapaisith said in September that both sides differed on the costs of at least two phases. One quote from Beijing was 30 per cent above estimates. Projecting financing was another sticky issue.

Prime Minister Prayut Chan-o-cha also instructed Somkid Jatusripitak, his deputy in charge of economic affairs, during the Cabinet meeting to follow up on and accelerate the development of the infrastructure fund to help with the financing of various infrastructure projects next year.

The Cabinet also gave the nod to the Board of Investment (B0I) and the Finance Ministry to provide import duty, excise and value-added tax exemptions for testing and prototyping vehicles in the country. The measure would promote foreign investment in automobile testing facilities in the Kingdom.

Expenses for research and development as well as the production of test or prototype vehicles can be used as a deduction for corporate income tax.

The Revenue Department will be in charge of selecting firms that will be approved for the benefits and monitoring the vehicles from the day they enter the country to the day they are destroyed.

The beneficiaries are businesses dealing in the research and development of automobile performance and manufacturers supplying test vehicles for researchers.

Another condition is that the vehicles must have never been registered or sold in Thailand.

The Cabinet also approved in principle the Industry Ministry’s proposal to identify "10 industries for the future". They have the potential to become the country’s new economic growth engines.

They include five existing industries that will be further supported including the automobile of the future, smart electronics, quality tourism, agriculture and biotechnology along with food for the future.

The five new industries are robots for manufacturing, logistics and aero industry, energy and biochemical, digital economy along with the medical and health industry.

The industries will be granted BoI privileges, while the Finance Ministry is considering more tax incentives and the setting up of a joint venture fund with the private sector to support the 10 industries’ R&D programmes.